After struggling to pay its suppliers, American retail giant Sears files for Bankruptcy

Sears employs nearly 90,000 people in US and is known to have more than 3,000 stores. They are currently selling out their properties and their 142 unprofitable stores in order to clear debts racking up to more than $5bn, they had already announced that by November this year 46 of those stores will be closed. The store faced tons of competition from Walmart in 1980s and later from online retailers such as Amazon and eBay. Sears ultimately filed for bankruptcy on Monday as it couldn’t meet the $134m repayment due on Monday and Chapter 11 protection postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.

Eddie Lampert – who is the company’s chief executive, biggest investor in a statement to the press said “Over the last several years, we have worked hard to transform our business and unlock the value of our assets.”

“While we have made progress, the plan has yet to deliver the results we have desired.”

Some analysts say Sears’ problems arose cause they became “too diversified and lost the deftness that had once made it the world’s largest and most innovative retailer”. Many also add that they did not invest in their stores, making it far too easy for newcomers to replace traditional sellers like Sears and Walmart. Walmart also abruptly closed 63 Sam’s Club stores and layed off thousands of workers. Walmart’s also witnessed an extreme plunge in stock price that wiped out $18 million of the company’s market value.

“That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous,” he said.

“The brand is now tarnished just as the economics of its model are firmly stacked against its future success.”

Sears was founded in 1886 as a mail order catalogue business and later expanded into bricks-and-mortar stores to become a fixture in shopping malls across the US.

Mr Lampert’s hedge fund, ESL Investments took a stake in Sears in 2004 and later joined Kmart and Sears with the aim of restoring its profitability.

Despite this step, Sears continued to rack up more than $6bn in losses between 2013 and 2017, while annual revenues halved.

Sears Canada, which was built as a spin-off from the main company in 2012 also filed for bankruptcy last year and costed more than thousand people their jobs.